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Response Letter

 November 21, 2005

 Mail Stop 7010

 Securities and Exchange Commission

 450 Fifth
Street, N.W.

 Washington, D.C. 20549

 Attention: Rufus Decker,
Accounting Branch Chief

Re:
NATCO Group Inc. – File No. 1-15603

 Form 10-K/A for the Fiscal Year Ended December 31, 2004; Forms 10-Q for the Quarters Ended March 31 and June 30, 2005

 Ladies and Gentlemen:

 On behalf of NATCO Group Inc., we enclose a memorandum in response to the comments of the Securities and Exchange Commission in its letter of
November 4, 2005. In submitting its response, the Company acknowledges that:

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The Company is responsible for the adequacy and accuracy of the disclosure in its filings under the Securities Exchange Act of 1934;

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Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to such filings; and

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The Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

 If you have any questions regarding these comments, please
direct them to Richard W. FitzGerald, Senior Vice President and Chief Financial Officer (713-685-8082) or, in his absence, Katherine Ellis, Senior Vice President & General Counsel (713-685-6183).

 Sincerely,

 /s/ John U. Clarke

 /s/ Richard W. FitzGerald

John U. Clarke

Richard W. FitzGerald

Chairman & Chief Executive Officer

Senior Vice President & Chief Financial Officer

Brookhollow Central III

Telephone: (713) 683-9292

2950 North Loop West, 7th Floor

Facsimile: (713) 812-6654

Houston, Texas 77092

 US Securities & Exchange Commission

 November 21, 2005

 Page 2 of 2

 Enclosures

cc:
Scott Watkinson, Staff Accountant

 Stop 7010

 Jeanne Baker, Assistant Chief Accountant

 Stop 7010

 Bill Swanstrom

 Locke, Liddell &
Sapp

 Marc Watts

 Locke, Liddell & Sapp

 Eric Johnson

 Locke, Liddell & Sapp

 Al Kekish

 KPMG LLP

RE:
Form 10-K/A for the Fiscal Year Ended December 31, 2004

 Forms 10-Q for the Quarters Ended March 31 and June 30, 2005

 File No. 1-15603

 November 21, 2005

 Memorandum of NATCO Group Inc. in Response to Comments of

The Securities and Exchange Commission dated November 4, 2005

 Form 10-K/A for the Year Ended December 31, 2004

 General

1.
Where a comment below requests additional disclosures or other revisions please show us in your response what the revisions will look like. Such revisions may be included in your
future filings, including your interim filings where appropriate.

 Response: We have provided proposed additional or revised disclosures as appropriate below. New language in the proposed revised disclosures is underlined and in bold to aid review.

 Financial Statements, page 46

 Consolidated Statements of Operations, page 47

2.
We have reviewed your response to comment two and have the following additional comments.

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Clarify how you account for these apparent multiple deliverable arrangements. Confirm and revise your disclosures to clarify that you appropriately account for these contracts in
accordance with EITF 00-21 – Revenue Arrangements with Multiple Deliverables.

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Please tell us the amount of revenues related to services characterized as largely ancillary to product sales and the amount of other service revenues for each period presented and
the subsequent interim period.

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It is unclear to us why you believe that service revenue that is ancillary to product sales is not required to be separately disclosed under Rule 5.03(b). In this regard, we note
that it is more often than not that services provided by a company would be ancillary to the products sold by a company. Please reassess your compliance with the disclosure requirements of Rule 5-03(b) with regard to the total service revenues
recognized for each period presented.

 Response:

 With regard to EITF 00-21, at the
time the standard became effective, the Company reviewed its impact on revenue recognition. The Company has the following types of revenue that were described in our previous response:

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Incidental labor to install parts and equipment that are quoted, ordered and billed on a single invoice. In instances where we sell products and perform installation we recognize
revenues when both the product has been delivered and the installation has been completed. In the notes to our consolidated financial statements we describe this type of revenue as being recognized on an as delivered, as performed basis.

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Incidental labor to perform testing and start up services are, at times, provided for larger built to order projects. This work is typically done under a separate contract at market
rates and revenue is recognized on an as performed basis. This type of work is done infrequently and is not material. In those instances, a typical multi-million dollar contract could have incidental labor that ranges from $10,000 to $50,000.

 1

 The Company’s accounting for these types of arrangements is done under applicable GAAP and we
believe our current revenue recognition disclosures are appropriate.

 With regard to separately stating products and services on the income statement per Rule 5-03.1, the classification of our revenues and costs into products and services is complicated in that a significant portion of our business activity
generates revenue that has commingled elements of both products and service. This business activity includes the related labor to install parts and standard equipment that are quoted, ordered and billed on a single invoice. The related service
associated with the parts and standard equipment sale is treated in our records as part of the product since we view the activity as being driven by the availability of the parts and equipment. In addition, the related cost of goods sold
determination for products and services would be difficult and not very meaningful as it would require a significant degree of subjective cost allocations between the two categories.

 Our field service activity, not related to parts and equipment sales, is tracked separately and accounts for less than 10%
of our revenues for all periods presented. This activity encompasses our field service personnel performing operating tasks, regular maintenance and other labor related activities for customers and includes incidental labor for testing and startup
of installed or constructed equipment. Due to this fact and given the impracticability of separating products and services that are quoted, ordered and billed on a single invoice in a way that would be reliable and meaningful, we believe the
criteria for combination under Rule 5-03 (b) have been met.

 Consolidated Statements of Cash Flows, page 49

3.
We have reviewed your response to comment three. Notwithstanding the fact that the post-retirement benefit obligation relates to retirees who were never employed by “the
Company”, we note that this obligation was assumed in connection with your acquisition of the common stock of National Tank Company and W. S. Tyler Incorporated. It is unclear to us how your assumption of this obligation is any different than
any other obligation assumed in a business combination. We do not disagree that your assumption of the post-retirement benefit obligations was a financing determination made at the time of the acquisition. We also do not disagree that if you had
borrowed funds to finance the purchase, rather than assuming the post-retirement obligation, the predominant source of the related cash outflows would be a financing activity in accordance with paragraphs 19 through 20 of SFAS 95. However, we also
note that if, instead of assuming the obligation or financing the acquisition with borrowings, you had paid a higher price in cash, the cash outflow would be classified as an investing cash flow in accordance with paragraphs 15 through 17 of SFAS
95. Therefore, without additional persuasive information provided by you or reference to specific authoritative literature that supports your accounting, we believe that you should revise your Statements of Cash Flows to present your payments
related to the post-retirement benefit obligations within your cash flows from operating activities. In this regard, we remind you that paragraph 21 of SFAS 95 indicates that “[o]perating activities include all transactions and other events
that are not defined as investing or financing activities in paragraphs 15-20.”

 Response: We have reclassified payments related to the post-retirement benefit obligation from “cash flows from financing
activities” to “cash flows from operating activities ” within the Unaudited Condensed Statement of Cash Flows in the Company’s Form 10-Q for the quarter ended September 30, 2005. We have also included disclosures
regarding this reclassification in note 1 of the Notes to our Unaudited Condensed Consolidated Financial Statements and in the “Liquidity and Capital Resources” and “Other Matters” sections of management’s discussion and
analysis included in the September 30, 2005 Form 10-Q. We do not believe this change is material to a reader of our financial statements or would have influenced the judgment of a reasonable person relying on the financial reports of
the Company. Our evaluation for this conclusion included an assessment of qualitative as well as quantitative matters as described in Staff Accounting Bulletin No.99 “Materiality” (SAB 99) and underlying accounting literature
regarding materiality. Primary factors supporting our conclusion that the reclassification is not material are:

 2

 Cash flow from Operations

 For the nine months ended September 30, 2005, the six months ended June 30, 2005, and the three months ended
March 31, 2005, cash provided from operations decreased from $12.0 mm to $10.8 mm, $7.0 mm to $6.2 mm, and $1.5 mm to $1.1 mm, respectively, due to the reclassification. For the years ended December 31, 2004 and 2003, cash provided from
operations decreased from $2.7 mm to $0.9 mm, and $12.6 mm to $11.0 mm, respectively.

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The Company’s quarterly cash flow activity from operations is impacted by several factors, including working capital changes, and has had a wide swing over the past two years
with limited or no connection to income or segment profit levels for the periods. Due to the relatively high investment in working capital required by the Company’s operations, focus on cash from operating activities as a measure of the
Company’s liquidity position can be deceptive due to period-to-period changes in current asset and liability balances. These changes can occur due to differences between revenue recognition timing and contractual billing arrangements and
fluctuations in inventory based on expected increases or decreases in business, among other items. For this reason, the Company believes its stakeholders, including debt and equity holders, use segment profit as the primary measure of liquidity for
the Company.

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Management believes segment profit and net income are the primary drivers for the company’s stock price, with revenue and bookings, which indicate near-term earnings potential,
being other important factors. Management believes that the cash flow statement for the Company is not a major driver for value determination or present / near-term future income contribution levels. Cash flow is not presented or emphasized in the
earnings releases or on the earnings call and is not discussed on the call. Segment profit, net income, revenue, debt, bookings and working capital levels are discussed and these amounts have not changed as a result of the reclassification.

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None of these changes affect the income statement, balance sheet, segment profit, net income, working capital, earnings per share or debt levels as reported in the 2005 10-Qs or the
December 31, 2004 10-K. Management believes these items, and in particular revenue, net income and segment profit, are viewed as material for a reasonable investor to evaluate the Company.

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This reclassification, while impacting the amount of cash from operations, would not alter the results of the line from a positive result to a negative result in the periods under
consideration.

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For the years ended December 31, 2003 and 2004 and the nine months September 30, 2005, cash from operations was $12.6 mm, $2.7 mm and $12.0 mm, respectively, reflecting
the variability of cash from operations for working capital changes, among other items. Over the same time periods, NATCO’s segment profit was $14.6 mm, $20.0 mm, and $25.0 mm, respectively. NATCO’s common stock price tracked more closely
to the steady rise in segment profit over this time frame from a closing price of $7.59 at December 31, 2003 to $8.80 to December 31, 2004 and finally to $25.32 at September 30, 2005. Note the lack of correlation of the common stock
price to the cash from operations variance. Based in large part on the historical indifference NATCO’s investor base has demonstrated to large fluctuations in cash from operations, as evidenced by equity market reaction, this reclassification
is considered by management to be immaterial for restatement of prior period cash flow statements.

 Net Cash Used for Financing

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Debt level and the leverage ratio are the drivers for investors to evaluate the cash strength of the Company and both were unchanged as a result of this reclassification.

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For loan covenant purposes, the reclassification had no impact on the financial ratios. Moreover, the Company’s loan covenants ignore the post-retirement payment in making the
fixed charge determination.

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Changes in cash flow from financing have historically fluctuated due to borrowings required by changes in working capital and the reclassification does not change any trends on the
cash flow statement and it is considered by the Company to be immaterial.

 3

 SAB 99 Review

 In evaluating the materiality of the post-retirement benefits reclassification to the cash flow statement, the Company has considered the following guidance from Staff
Accounting Bulletin No. 99 – Materiality.

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Materiality judgments can only be made by those who have all the facts. To meet this requirement, this analysis has been prepared by the Company’s senior financial management.
The resulting conclusion and related documentation have been reviewed with the CEO and the Audit Committee, both of whom concur with the conclusions reached herein.

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Financial management has considered both “qualitative” and “quantitative” factors in assessing an item’s materiality. As described in this document, the
Company has evaluated and presented both the quantitative and qualitative impact of the misstatements and the impact on the total mix of information available to the investor.

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Management has evaluated if there is a substantial likelihood a reasonable person would consider it important or be changed or influenced by the correction and has concluded the
measures such as segment profit, net income, revenue, debt level and income are the primary indicators a reasonable person relies on in evaluating the Company and that the reclassification in the statement of cash flow discussed above are not
material to investors making investment decisions in the Company.

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We have considered whether or not the following would render a reclassification qualitatively material and have concluded they would not.

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The reclassification does not mask a change in earnings or operating activities historical trends. The Company believes analysts and investors are relying primarily on segment
profit, revenue and net income as indicators rather than cash flow from operations, therefore, we do not believe the reclassification hides a failure to meet analysts’ or others’ expectations. The reclassification does not hide any failure
of the Company to meet any of its previously issued earnings guidance. Also, the Company does not provide any cash f